Press Room

Tycoons advised on charity: Western experience sought after to advance China's development

 

The newly rich in China are looking to the West for experience again. But this time, they want to learn how to spend money, rather than how to make it.


Zhang Xin, CEO and co-founder of Soho China, a leading real estate developer, said she had no clear strategy when she started her journey into philanthropy.


"In the early days, when I established the Soho China Foundation, we did not have a clear plan. We gave money to build a school here and set up a kindergarten there and rushed to help people affected by a tsunami," Zhang said.


Zhang said she gradually realized that it is important to discover the pressing social problems China faces and then choose one field that requires a huge investment of money and human capital.


The female billionaire said her foundation started the project Teach for China, which is dedicated to training teachers in rural schools in Northwest China's Gansu province, one of the most impoverished provinces, six years ago.


"Teach for China is what we learned from an American foundation," she said.


Zhang made her remarks at the China Philanthropy Forum 2012, which was jointly held on Friday by the China Association for International Friendly Contact, Caijing Magazine and other organizations in Beijing.


Peter Buffett, musician and philanthropist, said his father, renowned investor Warren Buffett, gave each of his three children $1 billion to fund charitable foundations in 2006.


The junior Buffett, who also attended the forum, said his father's "reverse birthday gift" allowed him to think about the issues in the world, and later he and his wife set up NoVo, a foundation focused on helping girls and women worldwide.


Former British prime minister Tony Blair said during his keynote speech at the forum that he has found "a new life" in global philanthropy.


After leaving government, Blair has devoted himself to philanthropy across the world, especially in Africa, he said.


Blair said he believes philanthropy is vital for a healthy and flourishing society, which can get things done more efficiently than government, an observation he credits to his experience as prime minister for 10 years.


Cheng Gang, president of the China Foundation Center, a leading information portal for charitable foundations, told China Daily in a telephone interview on Friday that more and more successful entrepreneurs and business people in China have started to establish their family grant-making endowed foundations in recent years.


"Since the opening-up more than three decades ago, the economic growth has facilitated the growth of China's first and second generation of entrepreneurs," Cheng said.


"After years of wealth accumulation, some rich Chinese start to ponder the question of how to deal with the huge amount of wealth since they are getting older and they may not need so much money for themselves," he said.


"Family foundations allow the rich to spend their money more wisely and create more social values," he said.


Family foundations also enable rich families to preserve their core values and pass the spiritual legacy to their successive generations, he stressed.


However, it remains a fledging sector, as there are fewer than 50 family foundations in the Chinese mainland, accounting for about 1 percent of all charitable foundations, Cheng said, citing his center's latest research results.


These foundations' annual spending merely takes up less than 2 percent of all mainland foundations' total spending, he added.


But the legal system, especially unsound tax deduction policy, may hinder the development of family foundations in China, Cheng said.


On Nov 22, Lu Dezhi, founder and director-general of the Huamin Charity Foundation, complained at a forum focused on the development of private foundations in Guangzhou that he did not enjoy any tax exemptions for setting up his foundation, and was even hit with 20 million yuan ($3.21 million) in late fees.


Lu said the tax law requires people to pay income tax for their donations, and because the tax rate varies in different cities, he failed to pay enough tax because he was not aware of the difference. Lu said he spent most of his time doing business in Shenzhen while setting up a foundation in Beijing.